By Nicole Friedman 

Oil prices held their morning gains Wednesday after government data showed a larger-than-expected drop in U.S. crude supplies.

Crude-oil stockpiles decreased by 4.5 million barrels to 362.5 million barrels, the U.S. Energy Information Administration said Wednesday. Analysts had expected stocks to fall by 900,000 barrels on the week, according to a Wall Street Journal survey. Stockpiles are at their lowest since February.

Light, sweet oil for September delivery traded up 62 cents, or 0.7%, to $95.10 a barrel on the New York Mercantile Exchange. The September contract expires at settlement. The more-actively traded October contract rose 41 cents, or 0.4%, to $93.27 a barrel.

Brent prices rose 40 cents, or 0.4%, to $101.96 a barrel on ICE Futures Europe.

The drawdown in supplies was due to an increase in refinery runs, said Andy Lipow, president of Lipow Oil Associates in Houston. Refining capacity utilization rose by 1.8 percentage points to 93.4% of capacity. Analysts had expected the operating rate to fall by 0.3 percentage point in the week.

"That was unexpected, the amount of increased utilization," Mr. Lipow said. "Across the country, refiners are running at high utilization rates."

Gasoline stockpiles rose by 585,000 barrels to 213.3 million barrels. Analysts had predicted a 1.3 million-barrel drop.

Front-month September reformulated gasoline blendstock, or RBOB, rose 1.77 cents, or 0.7%, to $2.7131 a gallon.

Distillate stocks, which include heating oil and diesel fuel, fell by 960,000 barrels to 121.5 million barrels, compared with analysts' forecast of a decline of 700,000 barrels.

September diesel edged up 0.33 cent, or 0.1%, to $2.8204 a gallon.

"What is concerning is over the last several months we haven't built significant quantities of diesel fuel" ahead of the winter season, when demand for diesel and heating oil increases, Mr. Lipow said. "We certainly could see prices increase."

Write to Nicole Friedman at nicole.friedman@wsj.com